Nevirapine is a non-nucleoside benzodiazepine that directly inhibits reverse transcriptase activity and acts on cell-free virions. This is a Phase III randomized, double-blind study of the effect of nevirapine versus placebo on maternal-fetal transmission of HIV. Nevirapine or placebo will be administered to pregnant HIV-1 infected women during labor, and to their neonates between 48 and 72 hours of age. The primary endpoint is the incidence of HIV-1 transmission from mother to infant. The study will include careful toxicity monitoring through clinical evaluations and laboratory monitoring. Mothers will be encouraged to take zidovudine. Infants will receive a single 2 mg/kg oral dose of nevirapine (or placebo) administered between 48 and 72 hours of life. The infant's study drug will be the same as the mother's randomized treatment assignment.